SK Group will form a strategic partnership with Plug Power, a leading provider of hydrogen fuel cell and fueling solutions enabling e-mobility, to accelerate the use of hydrogen as an alternative energy source in Asian markets. 

The South Korean firm said on Thursday (January 7) it will invest $1.5 billion (1.6 trillion won) to acquire a 9.9% stake in U.S.-based Plug Power. SK Holdings and SK E&S will each make a 800 billion won investment in Plug Power by acquiring approximately 51.4 million shares of common stock at a price of $29.29 per share. SK Group will be the largest shareholder of the company after its investment.

SK Group has also secured one board seat on Plug Power through the partnership.

Founded in 1997, the Nasdaq-listed Plug Power is a leading provider of comprehensive hydrogen fuel cell turnkey solutions. The company’s innovative technology powers electric motors with hydrogen fuel cells and it has capitalized on a shift in the power, energy, and transportation industries as countries address climate change and energy security, while meeting sustainability goals. 

SK Group has been studying and seeking a wide range of merger and acquisition opportunities in the renewable energy sector to secure its new growth engine.

The two sides started discussing possible investment in the early autumn of 2020. Plug Power was attracted to the proposal, as it mixes SK Group’s significant presence in Asia’s energy markets and strategic focus on green solutions through a hydrogen economy with the U.S. firm’s leadership in hydrogen fuel cell systems, fueling stations and green hydrogen generation. They plan to form a joint venture company in South Korea by 2022 to support the rapidly growing Asian hydrogen market. 

Citi Global Market Securities is serving as a financial advisor and Simpson Thacher & Bartlett is acting as legal advisor to SK Group, while Morgan Stanley is serving as a financial advisor and Goodwin Procter is acting as a legal advisor to Plug Power. (Reporting by Hee-yeon Han)